Procurement 4.0 In The Digital World
Industry 4.0 is ushering in an era of digital revolution where every aspect of supply chain will be transformed through innovative digital products. The concept of Procurement 4.0 is rooted in industry 4.0 and its disruptive nature of technology. Procurement 4.0 is a shift from the conventional process to a more adaptive process in the digital world which forces procurement executives to rethink the value added by the procurement within the company from a cost center to a profit center.
Consequently, procurement needs to shift its priorities to convert procurement into a profit driver.
Leveraging Big Data Analytics for Better Decision Making
Procurement sits at a confluence of internal teams and external business partners. Big Data analytics is increasingly about extracting business insights from internal data as well as from suppliers and
Across source to settle processes, big data can bring immense value to procurement performance spanning across spend analytics, supplier analytics, category analytics, compliance and performance. This can enable procurement take decisions like identification of key suppliers, exploring ways within their existing supplier base to pool categories with suppliers and supplier management.
Harnessing Technologies like Artificial Intelligence, Cognition and Robotic Process Automation (RPA) to Drive Enterprise Transformation
The procure to pay process can deploy a spectrum of technologies to drive efficiency, effectiveness and value from the function. AI and cognitive computing leverages iterative machine learning algorithms to categorize unstructured spend, cost, contract, supplier data into intelligence. Like cognitive bots can be used to automate answering a wide range of supplierqueries to increase streamline transactional procurement processes. RPA software automates several repetitive tasks across P2P to drive efficiency and remove human errors. Procurement needs to develop a strategy using new technologies to enforce enterprise wide transformation.
Increasing Enterprise Value by Co-innovating with Suppliers
There is significant pressure on the business to reduce R&D costs while simultaneously innovate to meet ever-changing demands of the consumer. In such a scenario, collaborative supplier innovation becomes the need of the hour. It is imperative that procurement should fulfill its role as an interface manager and catalyst between the external partners and internal functions, such as R&D, product development and production From supplier management perspective, procurement would need to be innovation driver within business to turn consumer requirements into tangible business requirements, identify and partner with key strategic suppliers to enable them become co-creators of business.